Lin Vu has $100,000 in an investment paying 9 percent taxable interest per annum. Each year Vu incurs $825 of expenses relating tothis investment. Compute Vu's annual net cash flow assuming the following:Required:a. Vu's marginal tax rate is 10 percent, and the annual expense is not deductible.b. Vu's marginal tax rate is 35 percent, and the annual expense is deductible.c. Vu's marginal tax rate is 25 percent, and the annual expense is not deductible.d. Vu's marginal tax rate is 40 percent, and only $500 of the annual expense is deductible.Note: For all requirements, round your intermediate calculations to the nearest whole dollar amount.Answer is complete but not entirely correct.Not cash flowb. Net cash flow$c. Net cash flow$d. Net cash flow$Amount

Answered: Lin Vu has $100,000 in an investment…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mr. Kinders has contributed $189.00 at the end of each month into an RRSP paying 3% per annum compounded annually GILE How much will Mr. Kinders have in the RRSP after 12 years? (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.). How much of the above amount is interest? (Round the final answer to the nearest cent as needed Round all intermediate values to six decimal places as needed)
2.166. Mrs. Eve put 10 OOO PLN on a deposit. The annual interest rate on the deposit is equal to 8%, and interest is capitalized every quarter. Calculate the amount that Mrs. Eve will have on the deposit:(a) after 9 months (b) after one and a half years (c) after three years of saving.Ignore tax on capital gains.
Alp Bilgin deposits $33.000 in asaving account that pays 9%interest compounded monthly.Four years later, he deposits $20.000. Three years after the20.000 deposit, he makesanother deposit in the amount of$16.500. Six years after the $16.500, half of the accumulatedfunds are transferred to a fundthat pays 12% interestcompounded quarterly. Howmuch money will be in accounteight years after the transfer?
Your company sponsors a 401(k) plan into which you deposit 10 percent of your $120,000 annual Income. Your company matches 75 percent of the first 10 percent of your earnings. You expect the fund to yield 12 percent next year. Assume you are currently in the 31 percent tax bracket. a. What is your annual Investment in the 401(k) plan? (Round your answer to 1 decimal place. (e.g., 32.1)) b. What is your one-year return? (Round your answer to 3 decimal places. (e.g., 32.161)) a. Annual investment b. One-year return 184.000 %
You bought a 5-year property class equipment for $20,000.00 and sold it after 3 years. Assume that the selling price of the equipment decreases uniformly by 5% each year. The equipment generated following income: $5,000, $5,500, and $4,500 in years 1 through 3, respectively. 5. Fill up the table below to show the after tax cash flow. Assume that you are already in the 28% income tax bracket. Use MACRS depreciation. Assume that depreciation recapture/loss is taxed at 15%. After tax cash flow Yr. Income Depreciation Таxable Income Income Тах b) Write down the equation to determine the after tax rate of return. DO NOT compute the rate of return.
Ms Smith borrows 5000 at 5% annual effective interest, with payments at end of each year. The lender keeps the interest portion and accumulates the principal portion in a fund at 3.5% until loan is paid in full. Ms Smith pays 750 each year until a smaller payment will complete the loan payment. What is the amount of this last payment, including interest?
Elizabeth makes the following interest-free loans during the year. Assume that tax avoidance is not a principal purpose of any of the loans. The relevant Federal rate is 5% and that the loans were outstanding for the last six months of the year. Borrower's Net Borrower Amount Investment Income Purpose of Loan Richard $5,000 $800 Gift Woody $8,000 $600 Stock purchase Irene $105,000 $0 Purchase principal residence By how much do each of these loans increase Elizabeth's gross income? If an amount is zero, enter "0". a. Richard is not subject to the imputed interest rules because the $10,000 gift loan exception does apply. Elizabeth's gross income from the loan is $ 0 b. The $10,000 exception does not income producing apply to the loan to Woody because the proceeds were used to purchase assets. Although the $100,000 exception applies to this loan, the amount of imputed interest is 1,000 X.Incorrect is $ 0 ✓. c. None of the exceptions apply gross income from the loan is $ to the loan to…
H3. Hannah invested $2,000 at the beginning of every 6 months in an RRSP for 11 years. For the first 5 years it earned interest at a rate of 4.70% compounded semi-annually and for the next 6 years it earned interest at a rate of 5.50% compounded semi-annually. Que 1. Calculate the accumulated value of his investment at the end of the first 5 years. Que 2. Calculate the accumulated value of her investment at the end of 11 years. Que 3. Calculate the amount of interest earned from the investment. Show proper step by step calculation

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